Changing encoding changes only file representation, not its content.
Picking up encoding.
If you don't know know the text's encoding, here you can quickly try all existing encodings.
Transcoding.
Allows converting file from one encoding to another. For instance from ANSI to UTF-8.
Also here the BOM tag can be specified. BOM is a common standard for specifying file encoding, adding 2-3 bytes with the encoding code at the file head.